Google net profit falls short of Wall St consensus

Web search leader Google Inc. reported on Thursday a 28 percent rise in profits that fell short of consensus expectations, as a recent jump in operating expenses offset market share gains against rivals.

Shares tumbled 5.5 percent in extended trade after Google said net income rose to $925 million, or $2.93 a diluted share, compared with the year-ago quarter's $721.1 million, or $2.33 per share. Excluding one-time items and stock option expenses, Google posted a profit of $1.12 billion or $3.56 per share, which was 3 cents per share short of Wall Street targets.

However, second quarter net income dropped from the $1 billion reported in the first quarter of 2007.

Other expenses, including the costs of operating its computer data centers, credit card processing costs and the cost of acquiring programming, jumped to $412 million from $345 million in the first quarter of 2007. These costs represented 11 percent of revenue from 9 percent earlier this year.

Wall Street was looking for a net profit, on average, of $3.01 per diluted share, according to Reuters Estimates. Excluding one-time items and stock option expenses, the consensus analyst forecast was $3.59 per share.

Forecasts ranged between $3.77 billion to $3.97 billion, according to Reuters Estimates. As a matter of policy, Google declines to provide financial guidance to Wall Street.

Shares of Google fell to $514.50 in after-hours trade, down from a close of $548.59 in regular session trade on Nasdaq.